The upcoming open enrollment period for 2018 Affordable Care Act exchange plans is likely to see fewer signups than last year, according to a new report from Standard & Poor’s.
The report predicted that the upcoming enrollment period—which begins Wednesday and ends Dec. 15—will conclude with 10.6 million to 11.4 million signups. That’s about 7%-13% lower than the 12.2 million who signed up during the 2017 open enrollment period, which lasted about twice as long.
Notably, the 2017 enrollment figures were lower than those seen in the 2016 signup period, the first time there was a dip in enrollment since the exchanges were established. At the time, some suggested the Trump administration’s decision to pull back pro-ACA ads fueled that decline.
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S&P predicted that most individuals who had ACA marketplace plans in 2017 will re-enroll, noting that 80% of them will likely receive tax credits to offset the cost of climbing premiums.
However, the ratings agency predicted that fewer new enrollees will enter the exchanges than during previous signup periods. A variety of factors contribute to that prediction, including less outreach from the federal government, a reduced broker presence in the individual market, shorter enrollment periods and higher non subsidized premiums.
For insurers, this means they will likely have to continue pricing for a higher-morbidity marketplace, as premiums won’t decline without a higher level of new enrollment or mechanisms like reinsurance to boost states’ individual markets.
S&P said it is maintaining its previously stated prediction that individual market insurers will reach target profitability, but notes that “with the increased political risk around this marketplace, making forecasts of a status quo is especially challenging.”
Along similar lines, a recent report from the Brookings Institution found that before the Trump administration ended cost-sharing reduction payments, insurers were on track to either break even or make modest profits on ACA-compliant individual market policies in 2017. In a stable policy environment, that would have set the stage for relatively moderate premium increases in 2018.
“The fact that premiums will rise more significantly reflects the adverse effects of decisions made by federal policymakers over the course of this year,” the report concluded.